Options Playbook Radio

The holiday season brings to mind covered calls.

In this episode, Brian covers:

  • Last week's trade in DIS
  • What did we want to happen?
  • What DID happen?
  • Avoidint the stupid award
  • The holidays are coming, that means shortened trading weeks
  • It might be a good time to trade covered calls
  • Getting "free" time decay with holidays
  • Where is AAPL?
  • Selecting strikes
  • And more...
Direct download: OptionsPlaybookRadio184.mp3
Category:financial podcast -- posted at: 1:16pm CST

Since it is still earnings season, it makes sense to capture the movement surrounding earnings announcements. In this case, we are looking at a bullish ratio spread in DIS.

In this episode:

  • A recap of what happened with last week's FB position
  • After AMZN, FB looked a little boring
  • DIS reports earnings after the close on Thursday, November 9
  • What is the sentiment on DIS?
  • Looking at the long straddle to figure out pricing
  • Setting up a backspread in DIS
  • Picking the strikes and expirations
  • What is the downside? Upside?
  • What do we want to happen?
Direct download: OptionsPlaybookRadio183.mp3
Category:financial podcast -- posted at: 9:30am CST

Today we are going to look at a ratio spread with puts on FB.

In this episode:

  • A review of last week's skip-strike butterfly in AMZN.
  • What was the strategy? Expectation?
  • Where is AMZN now?
  • What about GOOGL?
  • How do you want the market to move when you have a butterfly position?
  • FB earnings are coming up. Let's look at a ratio spread.
  • What is the outlook?
  • Setting up the trade.
  • Selecting strikes.
  • What is the cost?
  • What do we want to happen?
  • What is the cost?
  • Remember volatility.
Direct download: OptionsPlaybookRadio182.mp3
Category:financial podcast -- posted at: 2:10pm CST

This is probably the biggest week of earnings reporting, when the most valuable stocks report. There are things to take into account because of earnings:

  • Remember that implied volatilities rise around earnings
  • Why a skip strike butterfly?
  • Setting up the trade to pay for itself
  • Where is AMZN trading right now?
  • What is the long straddle aka the expected move
  • Using the long straddle to select strikes
  • Earnings-related risks
  • What is the expected move?
  • Setting up the trade
  • What is the upside? Downside?
  • Nuances of options pricing
  • Remember time premium
Direct download: OptionsPlaybookRadio181.mp3
Category:financial podcast -- posted at: 11:55am CST

Mark and Brian are back to answer listener questions.

  • Question from Ejh4isu - Let's say you're short naked a bunch of puts and the trade goes against you, and you don't have the money to pony up? What can your broker do?
  • Question from LCB - This is a challenging time to sell options due to low volatility. So does it stand that the opposite is true? Is it a good time to buy options? Particularly protective puts?
  • Question from Andrew Lane - I tried searching for options on the major advisor news sources including Pensions & Investments and Financial Advisors magazine and came up blank. Why do these mainstream outlets ignore this space? Where should I go to learn more about options for advisors?
Direct download: OptionsPlaybookRadio180.mp3
Category:financial podcast -- posted at: 1:46pm CST

It's time to tackle listener questions again on Options Playbook Radio. In this episode, Mark and Brian cover:

  • Question from Albert Deckel - First, I want to thank you for all the effort you place into the options playbook. I find your lessons absolutely clear, understandable and instructive....a rare combination!! I bought your book and find that, also, clear and concise and very informative. Two questions: While I understand how to convert a "Delta" into meaning, I really don't understand what consists of a "high" vs. "low" Gamma, Theta or Vega. For example, when is theta so high that it makes the purchase of an contract dubious, or Vega so high that it makes the purchase of an OTM contract desirable? Also, if I were to write an ITM put, what combination of Delta, Gamma, Theta or Vega am I looking for? Thanks so much!! Al
  • Question from Tim - Why isn't it standard or maybe required to let people close out shorts for free below $.10?
Direct download: OptionsPlaybookRadio179.mp3
Category:financial podcast -- posted at: 3:38pm CST

We are continuing the discussion of options pricing. This week we take a deep dive into pricing of a butterfly.

Specifically:

  • Looking at a 10-day butterfly in AAPL
  • Picking a five-point spread
  • What strikes and expirations to choose?
  • What will this cost?
  • What is the maximum risk and reward?
  • What do we want to happen?
  • What impacts the pricing of butterflies?
  • Managing expectations
  • Looking at the same thing for a November 17 expiration
  • What is the ideal scenario?
Direct download: OptionsPlaybookRaido178.mp3
Category:financial podcast -- posted at: 1:44pm CST

Today Brian is covering a short call spread (which is bearish) on AAPL. All of this applies on the put side, but in this episode, calls are being featured.

Specifically:

  • What dynamics do you need to think about when trading short spreads?
  • Look at the most at-the-money straddle to get an idea about pricing
  • Example 1: November 17 expriation; 52 days out
    • Selecting strikes
    • What will this cost?
    • What is the max risk? Reward?
  • Example 2: October 6 expiration; 10 days out
    • Selecting strikes
    • What will this cost?
    • What is the max risk? Reward?
  • Which would you choose?
  • How to close out the trade?
  • How to roll the trade?

Do you have a question that you want answered on a future episode? Send them to Brian at theoptionsguy@invest.ally.com, or to the Options Insider at questions@theoptionsinsider.com.

Direct download: OptionsPlaybookRadio177.mp3
Category:financial podcast -- posted at: 1:01pm CST

In this episode, Brian explores long spreads. Specifically, long call spreads and long put spreads. These can be found on pages 60 and 62, respectively, of The Options Playbook. This is always available on OptionsPlaybook.com, in on the Amazon Kindle edition.

Details include:

  • The dynamics of spread trading
  • Using AAPL as an example
  • What to consider regarding forecasting and timing
  • The value of the spread does not provide quick rewards
  • Selecting strikes
  • What is the maximum risk?
  • What is the maximum reward?
  • Always look at how much time premium you have

Do you have a question that you want answered on a future episode? Send them to Brian at theoptionsguy@invest.ally.com, or to the Options Insider at questions@theoptionsinsider.com.

Direct download: OptionsPlaybookRadio176.mp3
Category:financial podcast -- posted at: 1:38pm CST

In this episode, Brian covers:

  • Using a pricing calculator to review different scenarios
  • Buying an out-of-the-money option
  • What happens to delta?
  • Looking at probability
  • When time is your ally
  • When to buy an out-of-the-money option
  • How to get low time premium
  • Closer to expiration = higher delta
  • What about at-the-money options?
  • When to buy, and when not to
Direct download: OptionsPlaybookRadio175.mp3
Category:general -- posted at: 4:03pm CST